The Senate late Thursday night approved the House's version of stopgap legislation to fund highway and mass-transit projects through the end of May, after the House earlier in the day rejected a Senate version that would have funded programs just through Dec. 19.
The bill, approved by the Senate by a vote of 81-13, goes to President Obama for his signature. The action came just hours before the Highway Trust Fund, the mechanism that finances transport projects, was ready to cut federal payments to states. Without an injection of funds from the general treasury, the trust fund was expected to run out of money by the end of the month. The current reauthorization was set for renewal on or by Sept. 30.
The House version transfers $10.8 billion into the trust fund, with the cost partially offset by a controversial maneuver known as pension smoothing, which allows companies to contribute less to their pensions in the short term. This, in turn, frees up more taxable income and defrays the cost of the transfer. Few people outside the House endorsed this approach, saying that it amounts to little more than budgetary legerdemain and that the pension obligations still must be fulfilled at some point.
Senators pushed for a Dec. 19 funding date to force Congress to approve a multiyear reauthorization between the November elections and the swearing in of a new Congress. The American Trucking Associations supported the Senate timetable, saying it avoids putting off the issue until next spring while still giving lawmakers enough time to act. Groups representing construction interests also endorsed the Senate version, arguing that delaying action on a multiyear reauthorization until May puts road builders at risk of missing a key part of the warm-weather construction season.
The National Industrial Transportation League, which represents large industrial shippers, doesn't endorse any short-term extension. NITL has long called for a multiyear reauthorization supported by an increase in the federal motor fuels tax that is indexed for inflation. Taxes on gasoline and diesel fuel, currently set at 18.4 cents and 22.4 cents a gallon, respectively, have not been raised since 1993. Due to potential voter backlash, it is unlikely that Congress will agree to an increase in either tax in a long-term funding bill.
Shippers, truckers, and the U.S. Chamber of Commerce, among others, have called for a fuel tax increase as long as the funds are committed to transport infrastructure projects.
Gartner, Inc.